A day after rice export curbs, govt says kharif output could fall by 10-12 million tonne

Vibha Sharma

New Delhi, September 9

A day after the ban on the export of broken rice to increase domestic availability, the government today said Kharif rice production could fall by 10-12 million tonne due to poor rains in some places and factors such as crop diversification. However, India has surplus stocks available.

Food Secretary Sudhanshu Pandey said there are four drought-affected states, which this year have about 25 lakh hectares less area under cultivation, which translates into 7-8 million tonne less production.

“There are other states which have less area not due to deficit rainfall, but factors such as crop diversification. Total rice sowing is less by 38.06 lakh hectare as per DA&FW, loss of rice production may be 10 million tonne and in worst case it can be 12 million tonne this year due to variety of factors,” he said.

“However, with exports of 212 LMT last year, we can say that India is still surplus in rice production. Around 150 LMT is still surplus. It is early to say how much production will be affected due to poor rains,” he added, saying that there are places which have had surplus rains, which may see more yield which may compensate for production loss.

Notably, after imposing a 20 per cent export duty on non-basmati rice, the government yesterday banned the export of all forms of broken rice with immediate effect in an attempt to cool prices.

Domestic wholesale and retail prices of rice are showing an increasing trend along with cattle feed stock prices. While maize prices increased from Rs 19/kg (January 12022) to Rs 24/ kg (September 8, 2022), broken rice also increased from Rs 16/kg (January 1 2022) to Rs 22/ kg (September 8, 2022).

Terming the increase in export of broken rice “exponential and abnormal”, Pandey said during the period from April to August 2022, the export of broken rice increased by 4178% as compared to the corresponding period of 2019.

From the year 2018-19 (FY) to 2021-22 (FY) export of total broken rice increased by 319%. During the period from April to August 2022, the export share of broken rice increased to 22.78% as compared to the 1.34% in corresponding period of 2019.

The decision is expected to stop overseas shipment of around 4 MT, largely to countries such as China, where demand has grown exponentially in the last few months due to drought in their main growing areas. Between April and June, around 1.8 MT of broken rice was exported.

Out of total exports of basmati rice from India in April to July 2022, around 34 per cent has gone to Iran, 19 per cent to Saudi Arabia, 8 per cent to UAE, 7 per cent to Iraq and 5 per cent to Yemen.

The ban on broken rice has come into effect from September 9, but the notification says that between September 9 and 15, consignments and shipments for which loading began in the ports and shipping bills have been filed of vessels berthed or where broken rice consignments have been handed over to the Customs before the ban will be allowed to be exported.

As India also needs about 1100 crore litres of ethanol for E20 blending by 2025 which cannot be met from sugar-based feed stocks alone, under National Biofuel Policy 2018, government allowed ethanol production from grain-based feedstocks.

Understanding export curbs

Broken rice: Free to prohibited with immediate effect

Non-Basmati (others) paddy/brown: Free but with 20% export duty with immediate effect

Non-Basmati/parboiled/Basmati: No change